Is The Era Of Robust Smartphone Growth Over?

by CXOtoday News Desk    Apr 28, 2016

phones

The era of insane smartphone growth is supposedly getting over. Globally, around 334.9 million handsets were shipped in the first quarter of 2016,according to market research firm IDC, showing a mere 0.2 percent increase over the same period last year, the smallest year-over-year growth ever recorded.

The latest research from Strategy Analytics was even more shocking that predicted global smartphone shipments shrink 3 percent annually from 345.0 million units in Q1 2015 to 334.6 million in Q1 2016. Going by this report, this is the first time ever in history the global smartphone market has shrunk on an annualized basis. 

Linda Sui, Director at Strategy Analytics, said, “Smartphone growth is slowing due to increasing penetration maturity in major markets like China and consumer caution about the future of the world economy.”

Why smartphone market is flat?

There are many reasons why the market has become flat. Apart from economic reasons, everyone who wants a smartphone owns one. Moreover the phones they’re buying are so good that they don’t need to upgrade as often.

Samsung maintained first position with 24 percent share for the quarter, broadly around the same level as a year ago, as per Strategy Analytics report. “Samsung shipped 79.0 million smartphones worldwide in Q1 2016, dipping 4 percent annually from 82.7 million units in Q1 2015. Samsung’s new Galaxy S7 flagship and its popular J series models are helping to hold steady its smartphone leadership.

Apple fell 16 percent annually and shipped a disappointing 51.2 million smartphones worldwide in Q1 2016. Apple’s global smartphone market share has softened from 18 percent to 15 percent in the past year. Apple is facing iPhone fatigue and pressure is mounting for Apple to innovate a new wow design beyond its standard rectangle form factor.”

Huawei maintained third position with 8 percent global smartphone market share in Q1 2016, up from 5 percent a year ago. It grew 64 percent annually to ship an impressive 28.3 million smartphones worldwide in the quarter. “Huawei is closing the gap on Apple, but Huawei itself is now being chased hard by ambitious rivals like Oppo and Vivo,” Woody Oh, Director at Strategy Analytics, added.

Lesser known brands emerging

IDC’s report noted two lesser-known Chinese brands, Oppo Electronics and Vivo, placed fourth and fifth in the ranking of top smartphone vendors, supplanting more familiar brands Lenovo and Xiaomi.

Linda Sui, Director at Strategy Analytics, added, “Oppo shipped 15.5 million smartphones and soared to fourth position with 5 percent global smartphone market share in Q1 2016. Oppo has been well known in the smartphone industry for several years, but it is finally breaking into the wider public consciousness with its popular range of 4G models like the R9 across Asia and elsewhere.

Xiaomi maintained fifth place with 4 percent global smartphone market share in Q1 2016. Xiaomi remains under pressure from Oppo Vivo and others across Asia, while it is still very weak in North America and Western Europe and the vendor will need to target these regions more aggressively if it wants to catch Huawei and others in the future.”

Apple is currently introducing smaller, relatively cheaper iPhone SE, for emerging markets. The company is looking to expand its product line to attract those on a budget could help Apple boost profits in mature markets.